Agile project management in the construction industry - An inquiry of the opportunities in construction projects

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1 Department of Real Estate and Construction Management Thesis no. 148 Civil Engineering and Urban Management Master of Science, 30 credits Architectural Design and Construction Project Management Agile project management in the construction industry - An inquiry of the opportunities in construction projects Author: Mattias Yllén Johansson Stockholm 2012 Supervisor: Tina Karrbom Gustavsson, PhD

2 Master of Science thesis Title Agile project management in the construction industry - An inquiry of the opportunities in construction projects Authors Mattias Yllén Johansson Department Real Estate and Construction Management Master Thesis number 148 Supervisor Tina Karrbom Gustavsson, PhD Keywords Agile Project Management, Design phase, Construction projects, Project Management, Communication, Organisational change I

3 Abstract Project management is today a current and highly discussed area. How projects within the construction industry are managed has not changed significantly during the last decades. The construction market, the number of different actors and the way that projects are procured today has however changed. This has led to a gap between the managerial view on how construction projects should be conducted today and how they actually are executed. This is reason enough to question this conservative industry and look into what possibilities there might be in the future. The Agile project management approach evolved from the software industry where it has grown and developed through empirical progress. It is suited for large complex projects where it is difficult to specify the product in advance. It is today used in different industries but mostly in the software business where the customer detects their needs through means of repeated tests and improvements to a prototype. This thesis has researched what opportunities there might be in implementing the Agile project management approach in the design phase of construction projects. The major advantages found with implementing the Agile approach is an increase in the client s involvement. The Agile approach almost forces the client to increase their participation in the project compared to the situation today. It can also decrease uncertainty and improve risk management. By the use of time management and specific meetings it will also be beneficial for keeping track of the project s progression and status. II

4 Sammanfattning Projektledning är idag ett högaktuellt ämne som diskuteras intensivt. Sättet projekt inom byggbranschen styrs och leds har inte förändrats nämnvärt under de senaste decennierna. Byggmarknaden, antalet aktörer och hur projekten upphandlas idag har dock förändrats. Detta har lett till en spricka mellan ledarskapssynen på hur byggprojekt skall utföras idag och hur de faktiskt genomförs. Detta är skäl nog att ifrågasätta denna konservativa bransch och titta närmre på vilka möjligheter till förbättringar som kan finnas i framtiden. Den Agila projektledningsmetoden har utvecklats inom mjukvarubranschen där den har vuxit och förbättrats genom empiriska framsteg. Den är lämpad för stora komplexa projekt där det är svårt att ange och definiera produkten i förväg. Den används idag i olika branscher, men främst i mjukvaruindustrin där kunden upptäcker sina behov med hjälp av upprepade tester och förbättringar av en prototyp. Denna avhandling har undersökt vilka möjligheter till förbättringar som kan finnas i att använda Agila projektledningsmetoder under projekteringsfasen i byggprojekt. De största fördelarna som finns med att använda den Agila metoden är en ökning av kundens engagemang och involvering i projekten. Den Agila metoden nästan tvingar kunden att öka sitt deltagande i projektet jämfört med hur situationen ser ut idag. Metoden kan också leda till minskad osäkerhet och förbättrad riskhantering. Genom användning av time management och särskilda möten kommer de Agila metoderna också att vara till nytta för att hålla reda på projektets framåtskridande och status. III

5 Preface This master thesis is conducted within the program area of Architectural Design and Construction Project Management and has been made in collaboration with the Swedish consultancy firm Grontmij AB. It is the result of my last semester at KTH (Royal Institute of Technology) in Stockholm, Sweden. The idea for the topic and research question of this master thesis is based on my interest in management and organisational structures. During this semester, through my research and in the writing of this thesis, I have gained a broader perspective of the construction industry but most beneficial for me has been the insight in a new interesting management method. After I had completed the research for this master thesis I got the opportunity to interview the project manager (or scrum master) for a construction project in Sweden that uses Agile project management. To my knowledge this is the only project in Sweden who has already implemented this approach in their project. It gave me more contextual awareness on the entire subject and aided me in completing this thesis. First and foremost, I would like to thank all the interviewees for your participation. Your answers have been an essential part of this thesis and it would not have been finished without you. Secondly, I would like to thank the employees at Grontmij AB for a semester I will never forget. More specifically I would like to thank Ulf Myrin, who has been my supervisor at Grontmij AB, for the support, interesting discussions, directions and for helping me with practical stuff. Furthermore I would like to thank Matilda Marklund, Andreas Andersson, Emma Agneborg, Sara Björlin-Lidén and Leif Bertilsson at Grontmij AB for the great experience this semester has brought me. Last, but not least, I would like to extend a big thank you to my supervisor at KTH, Tina Karrbom Gustavsson for wise thoughts, ideas and support. This thesis would have ended up differently without you. Stockholm, June 2012 Mattias Yllén Johansson IV

6 Table of Contents 1 INTRODUCTION BACKGROUND Agile project management PROBLEM RESEARCH QUESTION PURPOSE DELIMITATIONS DISPOSITION METHOD CHOSEN RESEARCH METHOD REFLECTIONS ON THE CHOSEN METHOD DATA INTERVIEWS CHOICE OF INTERVIEWEES RESULT FROM THE INTERVIEWS CASE STUDY Grontmij AB LITERATURE REVIEW VALIDITY, RELIABILITY AND GENERALIZABILITY RESEARCH ETHICS CLARIFICATIONS THEORETICAL FRAMEWORK TRADITIONAL/WATERFALL MANAGEMENT PHASES OF CONSTRUCTION PROJECT Design phase DELIVERY METHODS Design/Bid/Build Design/Build ASPECTS OF PROJECT MANAGEMENT Level of Specialisation and Authority Flexible management Communication Meetings LEAN AGILE PROJECT MANAGEMENT History of Agile methods Agile Manifesto Timeboxing V

7 3.6.4 Success factors of Agile management Group constellation and roles Phases of an Agile project Product backlog Cycle backlog Good and bad conditions for using Agile management Suitable types of projects ORGANISATIONAL CHANGE Phases of a planned change Motivators for change Why group constellations work EMPIRICAL FINDINGS INTERVIEW RESPONSES GRONTMIJ AB Meetings Initial planning Roles and responsibilities Team structure Scheduling Client involvement Information and communication Additional findings CLIENT Meetings Initial planning Client involvement Information and communication Additional findings ANALYSIS AND DISCUSSION CLIENT INVOLVEMENT MEETINGS COMMUNICATION PROGRAM AND PRODUCT BACKLOG INITIAL PHASES CONTRACTUAL FORM CONSTANT IMPROVEMENT TIME MANAGEMENT DIFFERENCES CONCLUSIONS VI

8 6.1 QUESTION ANSWER RECOMMENDATIONS FUTURE RESEARCH AREAS REFERENCES LITERARY INTERNET FIGURES VII

9 1 Introduction This chapter will introduce the reader to the background and the problems associated with the topic of this thesis. It will also briefly present the Agile project management approach and explain the purpose, delimitations and clarifications used in this thesis. All this to give the reader a general understanding of the topic and ease the following reading. 1.1 Background Project management is today a current area undergoing intensive development. (Tonnquist, 2006, Preface), (Author s translation) Finding the optimal way of managing, control and coordinate projects is a constant challenge (Tonnquist, 2006). Adjusting working methods, clarifying roles, simplifying project reporting or visualising the project-status through new user-friendly management tools are examples of how this challenge can be met. Project management today often concerns the entire organisation whether it is a small private company or a larger public business. If you think about it, the whole idea of a tradition causes us to turn off our brains. [ ] Just blindly follow the past so you don't have to do the hard work of critical thinking in the present. (Linkner, 2011) The traditional way of managing construction projects has been around for half a century and is still the basis on which construction business relies. The way that projects are actually conducted has, however, changed. The gap between an old view on managing construction projects and a new way of actually conducting them creates an uncertainty and anxiousness within the business and its employees. People in the construction business today are at times aware that they are working in a way that is not always according to the managerial view causes confusion. To examine and define the way projects are actually managed and conducted today may ease the uncertainty and confusion. Another option might be to investigate the possibilities of using an already defined and tested management approach, which is the topic of this thesis. Whichever solution one chooses to pursue there is a need to question the traditions of the construction industry and look at the possibilities of the future. It the beginning of a project, when the amount of money spent in the project is at its low point, the possibilities of influencing the design and the direction of the project is at its highest (Gould & Joyce, 2009). This is illustrated in Figure 1, which also shows that the ability to influence the project decreases with time while the amount of money spent increases. Once the project has initiated the construction phase, changes made can become very costly both in time and in actual money spent. Figure 1 While the money spent in a project increases the ability to influence it decreases. (Gould & Joyce, 2009) 1

10 Furthermore, there are projects in which the time during the initial phases is a restricting factor when producing the required documents and investigating the necessary components. Therefore the material produced during these phases can include mistakes and errors. These will only be amplified the further one get into a project before they finally surface, at which point it may be too late or costly to correct it Agile project management The agile methods are a reaction to the processes that look good in theory but that do not hold up in practice. The agile methods are therefore described as empirical they are based entirely on practical experiences and work methods that are proven to work. (Softhouse, 2012, pp.9) Agile project management has its roots in the system development industry, and has developed and grown through empirical progress. This, however, does not mean that this methodology s uses are limited to that industry. The Agile methodology is a set of values, attitudes and principles, which can be embraced in other industries as well. Furthermore, the methodology includes different methods and tools to use when conducting a project, which will aid in the mission to follow its values and principles. Two main concepts within the Agile methodology are adaption to change and collaboration between people (Agile Sweden, 2012). Agile project management uses an interactive process that helps customers define their needs and requirements. The Agile approach is suitable for complex projects where it is difficult to specify the product in advance. It is widely used in the software industry where the customer detects their needs through means of repeated tests and improvements to a prototype. 1.2 Problem Large sums of money and a lot of time are put into a construction project. These among other aspects, such as the fact that many construction projects actually shape our society, are reasons why different stakeholders in a project are interested in its success. Construction projects throughout history have been overall mostly successful, and this in combination with it being a conservative business generates few incentives of changing the way a construction project is conducted today. It is, however, necessary to accept the fact that the market is constantly changing and the construction business need to take countermeasures in order to keep up. Creating a more flexible and adaptive way of proceeding with the planning and design phase may generate more communication between the different actors in a project. This would hopefully result in a more precise prototype and design, which all actors have agreed upon. A prototype with fewer errors before the production starts will lower the risks for expensive changes during the production phase. It is cheaper and easier to make changes in the earliest stages of a project and it is therefore important that the planning and design phase is efficient and streamlined so that it produces a flawless prototype that can go into production. There are most certainly different ways of improving and streamlining the design phase of construction projects and there is also most certainly a need for it. This master thesis will investigate what the Agile project management approach can contribute in the mission of developing a more efficient design phase. 2

11 The construction business can be conceived as a conservative business and has not changed significantly in the past decade. Because of this there are difficulties in trying to change the way a construction project is conducted today. The Agile project management approach is foreign to the construction industry, making it particularly interesting for close examination in relation to the industry. However, it might also be more difficult to get it accepted in this conservative business. What might ease the implementation, compared to other approaches perceived as unknown, is the fact that the Agile approach has similarities with the Lean philosophy, which is a concept already introduced in the construction business. 1.3 Research question The research question and the topic of this master thesis is as follows: What opportunities and benefits will come from implementing Agile project management in the design phase of construction projects? For it to be possible to answer the stated question above, the following question first needs to be investigated: What possibilities are there to implement Agile project management in the design phase of construction projects? 1.4 Purpose The purpose of this thesis can be divided into three parts. It is partly to introduce the Agile management approach to the construction industry in general. Partly to compare it with the construction industry to see what advantages there may be and partly to specifically explore what Grontmij AB might gain through the use of agile project management during the design phase. 1.5 Delimitations The area of this thesis has been limited to the design phase of construction projects. Opportunities, downsides or other possible affects that might exist in other types of projects or other phases of construction projects have not been taken into account. It has also been limited to benchmarking the Agile project management approach with the traditional approach found in the construction industry. No other approach has been investigated further. The research question implies that the implementation of Agile project management is also investigated. The subject of implementation is briefly discussed in the theory chapter and also in the analysis and conclusions. To change an organisation and implement a new management method is, however, a large topic that needs to be more thoroughly investigated and elaborated on and has therefore only briefly been discussed in this master thesis. This master thesis has been conducted during a period of 20 weeks, corresponding to 30 ECTS. 1.6 Disposition Firstly the research method chosen will be explained and commented on. Thereafter follows the theory chapter. This chapter will first explain the theory behind some relevant aspects of the construction industry and will then continue with shortly mentioning the Lean concept because 3

12 of its connection with both the construction industry and Agile project management. Following this is the main part of the theory chapter that will elaborate on and explain much of the theory behind the Agile project management approach. The last part included in the theory chapter is concerning organisational change. This is included to assist when answering the research question. The entire theory chapter acts as the base for the analysis when its compared to the empirical findings from the research conducted within this master thesis. Thereafter the empirical result collected during the research is presented and has been divided into the most frequently occurring topics. This chapter is then compared to the theory, analysed and commented on. The thesis then ends with presenting the answer to the research question, other conclusions based on the analysis and recommendations for Grontmij AB. 4

13 2 Method This chapter will present and explain the research method chosen to answer the question of this thesis. It also includes reflections on the chosen method and research ethics. 2.1 Chosen research method The research method for this thesis is qualitative. Semi-structured interviews have been conducted to find out how the process of planning and designing is executed today. These interviews have been conducted with project managers and/or responsible architects at four projects at Grontmij AB that were active within the time span of the design phase. Two of the projects were in the late stages of the design phase while the other two were in the middle of it. In three of these projects, representatives of the client have also been interviewed, in order to get their opinions on how the design phase is managed and executed. The reason for the fourth project not being examined from the client s side was that there were negotiations going on, and was not an appropriate time to investigate the project participants experiences. Before and during the interviews a study of literature has been done. Before the interviews the main focus of this study was to gain theoretical knowledge of how the design phase is managed and executed, and to learn what the Agile management approach means. The interviews aroused new subjects that needed to be included in this thesis, which is the reason for the literature study being prolonged. Constant guidance from both a supervisor at the Royal Institute of Technology and a supervisor at Grontmij AB has taken place during the entire time span of this thesis. Seminars concerning research methodology and the process of a master thesis have been attended on a number of occasions. 2.2 Reflections on the chosen method The qualitative research approach was chosen because it is useful when one needs to gain understanding of the issue at hand (Ghauri & Grønhaug, 2010). It tends to be less structured and more exploratory than the quantitative approach. It is considered suitable when studying organisations, groups and individuals. The research process chosen has allowed for exploration of new areas that are relevant within the topic of this thesis. A thesis, however, needs delimitations and due to this some areas has not been included or elaborated on. Some of these subjects are mentioned in chapter 7 Future research areas. 2.3 Data In the making of this thesis both primary and secondary data has been used. The primary data being results from the case study and the interviews conducted and the secondary data consisting of literature reviews and knowledge gained from scientific reports. 5

14 2.4 Interviews As mentioned above the interviews have been of the semi-structured type, which is common in the qualitative research approach (Ghauri & Grønhaug, 2010). This mean that the questions were predetermined but the interviewee could formulate and answer with his or her own words. It also allowed for raising elaborative questions, which were not predetermined, during the interview. The reason for choosing this type of interview was to create a more discussion-oriented interview and this is not possible when utilising a structured interview approach. In comparison to an unstructured interview in the semi-structured interview the interviewer is allowed to ask more direct questions. Furthermore, the interviewees were informed of the topic and purpose of this thesis before the interview. They were not, however, told what the Agile project management approach is and means. This is because their answers should only reflect on how they are presently managing and working during the design phase and should not be influenced by how they could or might do instead. 2.5 Choice of interviewees In all four investigated projects the project manager for the specific projects at Grontmij AB have been interviewed. In one of the projects the responsible and assisting architects were also included in the interview, and in one of the other projects the assisting project manager was included. The aim was to include the project manager and his or her closest (responsibility and authority wise) associate in all of the interviews in order to achieve the discussion-oriented interview mentioned above. This was not possible in two of the projects because of scheduling difficulties matching the participants calendars and these interviews were hence only conducted with the project manager. When deciding what person should be interviewed within the client s organisation, the project managers at Grontmij AB were asked whom they thought would be of most interest. The aim was to interview the person representing the client who was responsible for the affair with Grontmij AB and whom they have had the most contact with. This person s role, position and responsibilities have therefore differed between the three projects. It was also of interest to include this person s closest (responsibility and authority wise) in the interview. In two of the three projects this was possible but in the third, only one person representing the client was interviewed. As previously mentioned, it was only possible to interview three out of the four clients. 2.6 Result from the interviews All seven interviews have been conducted in person and have been recorded. Notes have also been made during each interview and the recordings have acted as a support in the analysis of the material gathered from the interviews. The results from the interviews have been used to investigate how the interviewees experience the overall design phase. The obstacles, difficulties or flaws that exists in the design phase of a construction project conducted today were examined. Also the possibilities there might be in improving the execution of the design phase were investigated. In the analysis, the results have been studied in relation to the theory about the 6

15 construction industry, Agile project management and the other relevant subjects raised within the theoretical framework. 2.7 Case study As this thesis has been conducted in collaboration with the technical consultancy firm Grontmij AB, a case study has been done. It has been done through participant observation, which means that the researcher to some extent takes part in the situation he or she is observing but acts restricted in order to influence it as little as possible. When collecting first-hand information in its natural environment participant observation is an effective way (Ghauri & Grønhaug, 2010). It is also a useful complement to interviews because it gives insight in what people actually do and think and not only what they claim to. The collaboration with Grontmij AB, and the possibility to work at their headquarters with access to their intranet, different documentation and office chit-chat, has contributed to the contextual awareness of the result of the study and the interviews Grontmij AB Grontmij AB is an international technical consultancy firm that has operations in a range of disciplines, such as Planning & Design, Transportation & Mobility, Water & Energy, Monitoring & Testing (Grontmij AB, 2012). The company is one of Europe's largest technical consultancy firms, has around employees in approximately 350 offices worldwide. In Sweden, Grontmij AB acts nationwide and are located at 20 different locations. In total they have approximately 800 active consultants in Sweden. 2.8 Literature review One of the purposes of the literature review was to gain knowledge on what benefits and possibilities that come with Agile management but also what constraints and weaknesses that Agile management can bring to the table in comparison to the traditional way of conducting projects. Another aim has also been to gain a more theoretical knowledge on how a construction project is conducted and managed and what related aspects are important to include and refer to within the topic of this thesis. Furthermore, the literature review has been an essential part in the analysis when comparing it to the empirical data in order to later on answer the question for this thesis. There is little written academic literature on Agile project management which has been a restricting factor. Therefore one academic main source has been chosen to describe the approach. This source explains the approach in a broad and general way that makes it understandable to different industries. It has, however, been complemented by other sources found on the subject. 2.9 Validity, reliability and generalizability In order to gain more validity, reliability and generalizability in the empirical data the choice of interviewing not only representatives from Grontmij AB but also their client was made. The combination of the notes taken during the interviews and the recordings has also minimised the loss of the empirical data gathered. The fact that both the interviewees and the projects are anonymous has hopefully contributed to more honest and accurate answers and thus more 7

16 trustworthy empirical data. However, since the interviews have been conducted with employees at Grontmij AB and their clients the answers might still have been affected in a restricting way even though the interviewees were told that it would be anonymous. Furthermore the projects will not be presented nor explained in this thesis in order to enable introduction of the common findings for the four different projects together and present a more general picture of the situation instead of a project-specific one. This study has investigated the possibilities of implementing Agile project management in the general construction business, and then more specifically at Grontmij AB, which is one of many technical consultancy firms, it can be applied to a broad perspective. During the writing process of this master thesis two independent master students have reviewed it twice to in order to check for implications, trustworthiness, amongst other aspects. Both a supervisor at the Royal Institute of Technology and also at Grontmij AB has likewise reviewed it Research ethics The interviews have been anonymous in order to allow the interviewees to speak freely and not feel restricted for fear of upsetting the employers, co-workers or client. The interviewees were told before the interview that it was going to be anonymous. This was also done because the focus of the empirical data should not be on who said what and why, rather on the findings itself and how that can be of use in the research process and answering the topic of this thesis. Furthermore, the projects investigated will not be explained, as the focus should not be on which project the findings originate from. This allows the focus to instead be on the combined experiences from the four projects studied and not on a specific project s situation Clarifications Some of the quotes in this thesis have been translated into English by the author from non- English references. These quotes have been marked with Author s translation. 8

17 3 Theoretical framework The purpose of this chapter is to lay the foundation of the thesis. This will be the base when answering the question at hand. It starts of with explaining one of many traditional management approaches and then continues with elaborating on relevant construction industry aspects. The Lean philosophy is then briefly explained because this is a concept know to the construction industry and it has many similarities with the Agile project management approach. To fulfil the purpose of introducing the Agile approach to the construction industry this approach is then explained and elaborated on more thoroughly. The chapter ends with briefly explaining theory on organisational change that can be related to implementing a new management method. 3.1 Traditional/Waterfall Management There are many different management methods used today and many of them are quite old. This is a brief introduction to one of these traditional management methods also known as Waterfall management. This introduction is given to ease the understanding of the more traditional way in which the construction industry is managed. In traditional project management there are distinct phases throughout the project life cycle (Hass, 2007). In this approach, an important part is the disciplined planning and control methods. The activities are performed in planned and orderly series. In order to perform such extensive planning the projects following this approach have the assumption that the project s future is predictable. Once a phase is completed it should not be revisited. There are of course both advantages and disadvantages with this approach as there are with any other approach. One advantage is that it is very structured and easy to follow. It also emphasizes the importance of the client s requirements. On the other hand it is very seldom that a project can fully follow the series as planned, since the conditions usually change over time and also it is difficult for the client to specify in detail all requirements at the start. This traditional approach is also referred to as the Waterfall approach and an example of it is illustrated in Figure 2. Figure 2 An illustration of an example of the Waterfall management approach. (http://www.waterfall-model.com) 9

18 3.2 Phases of construction project A construction project consists of several different phases. In the book Construction Project Management the authors explain that a construction project starts off with a feasibility analysis (Gould & Joyce, 2009). This phase is an investigation on an economic basis. The aspects that are most important to analyse is the cost, the time schedule, the budget and the market demand. If the feasibility analysis then show that the project will generate return, a decision to proceed with the project is made. The search for financial means begins and a procurement process for the design of the project is initiated. The design of the project can be procured with different contract forms, for instance the entire responsibility can be handed to one company or the different disciplines can be procured from different companies. The design phase will be described in more detail in section After the design phase there is sometimes another procurement process depending on what type of delivery method was chosen during the first procurement process. The different delivery methods will be described in section 3.3. The next step is the construction phase and this, as the name indicates, is when the decided design is actually realized and constructed in its physical form. When the construction is finished the project is handed over to the project owner including all necessary documents and instructions Design phase Gould and Joyce (2009) explain that the design phase can be divided into four different stages. The first is programming, the second schematic, the third design development and the last construction documents. In the first stage a program is created. This is a document where the requirement of the building is stated. It describes for instance the functions of the building, what particular spaces are needed and so on. The authors clearly state the importance of involving the user in the writing of the program because they have unique and specific requirements for that particular project. Furthermore, the owner s understanding may vary when it comes to the building process, depending on their original business. Those owners who seldom occupy themselves with building projects often need guidance and assistance from the professionals hired to produce the program and the design. The owners that are familiar with the building process do not need as much assistance since they are already familiar with it. This does not, however, mean that this process is less important in those cases. In the cases with inexperienced owners, the professional may need to take more initiative in involving the owner. The complexity of the project is also an important factor to consider (Gould & Joyce, 2009). The more complex a project is the more time and resources need to be dedicated to the project in order to make sure that the program becomes as accurate and descriptive as possible. At the end of the programming stage there should be a detailed program and usually an estimate and a time schedule. With this information the owner then decides whether to proceed with the project or cancel it. The next stage is the schematic design (Gould & Joyce, 2009). At this point the actual design of the project begins. Usually a team of architects develop several different designs that more or less fulfil the requirements stated in the program in order to find the best solution for the project. 10

19 Then they decide on a few and present them to the owner who, in turn, has the power to choose one or more to develop further. If the owner is not satisfied with the concepts presented, this would be the time to mention that so that the architects can start on new concepts without losing time. One can often save time and effort by including the construction professionals in this stage, since they can give advice on construction feasibility of the concept design. When this stage is completed the owner once again decides to either proceed with or cancel the project. If the owner decides to continue with the project the next stage is then the design development. At this point the owner has also decided on a single design and the purpose of this stage is to develop this design further and in much more detail. Different technical specialists are involved and according to Gould and Joyce (2009) it is usually the architect who coordinates their involvement in order to make sure their work is compatible with the design. The users should also be included at this point, in order to get the end product as user-friendly as possible. Now that the design is decided on, the users should be asked to specify the different needs, such as the amount of electrical outputs, special services for specific equipment and so on. Cost estimates are revised and at this point one can get more accurate numbers since the information pertaining to the numbers is more detailed than before. If the stages before this have been executed properly and thoroughly, the new cost estimates should not differ so much that the owner must abandon the project because it will be too expensive. The owner, however, still faces the concern whether the project will generate any return or not, should they continue with the project or cancel it before it is too late. The further the project has been developed the more money and time has been dedicated to it and the likelihood of abandoning it is constantly decreasing. The final stage in the design phase, according to Gould and Joyce (2009), is the production of construction documents. These documents are what the bid for the construction is based upon. These are the documents that the contractor will follow and build according to. So if they are disagreeing with the program criteria or the design agreed upon in the schematic phase it could lead to problems during the construction phase and may cost the owner a lot of money and time. 3.3 Delivery methods Delivery methods describe how the entire project process will be managed and in what steps the project will be delivered (Gould & Joyce, 2009). They explain the relationships between the owner, architects, contractors and so on during each phase of the project. It is the responsibility of the owner to choose the most appropriate delivery method for the specific project. Sometimes, however, the design professional is involved in the project before this choice has been made and in that case the designer usually assists the owner in making this choice. The biggest dilemma in choosing between the different methods is price versus performance. Projects require different methods depending on the complexity. Using the correct or most appropriate method can decrease time and cost. The delivery methods do not say anything about the price tag of the project; this is discussed and explained in the contracts between the different actors. The delivery methods and the contract types complement each other and together they generate the specific prerequisites for the project. 11

20 The most common delivery methods are design/bid/build, design/build and construction management. The last of these will not be explained since it has no relevance to the empirical data collected Design/Bid/Build If this delivery method is chosen it means that the owner begins with hiring a design professional to design the project, including the complete contract documents (Gould & Joyce, 2009). With these documents and information the owner then proceeds with either tendering for the construction part or negotiating with a specific contractor. The hired contractor is then responsible for delivering the project as is described in the contract documents. The contractor can in turn choose to hire subcontractors but the overall responsibility of the deliverance is still with the contractor hired by the owner. There is no contract between the architect and the contractor. The contracts are between the owner and architect, and the owner and contractor. The most significant benefit with this method is that it reduces the level of risk and uncertainty (Gould & Joyce, 2009). It has well-defined relationships, procedures and contractual rules of conduct, which are well-known for most professionals in the business. Furthermore, this method protects the owner contractually from, for instance, risk for cost overruns. The owner already knows most of the final costs quite accurately before the construction, but if the contract documents are not accurate and complete there will be changes that will probably increase the owner s costs considerably. This method also gives the owner the benefit of an open market tendering, where the competitor with the lowest price is usually chosen. This gives the owner the lowest market price for the project and a better economic efficiency. There are also negative sides to this method and one of these is that the contractor who will construct the building is not involved in the design phase and can therefore not check the design for constructability and so on (Gould & Joyce, 2009). This problem can be avoided through hiring pre-construction consultants. Although, it is always most effective to have the contractor who will actually construct it to review the design. Furthermore, this traditional approach does not allow the construction phase to begin before the design is completed (Gould & Joyce, 2009). The project will be conducted in sequences, the design always needs to be completed before the tendering can begin, and thereafter the construction can begin. In recent times, the use of this approach has been declining because of time pressure. Since the parties work separately and on different stages of the project, there is little room for teambuilding and interaction between the participants. This can lead to major relationship problems. Unforeseen conditions can also add to difficulties in the relationship Design/Build This delivery method means that the owner chooses a firm to have the overall responsibility throughout the project (Gould & Joyce, 2009). This firm is responsible for the design and then, without a tendering process in between, the construction. The contracted firm can either have the resources for these tasks in-house or hire external firms to perform the work, but the responsibility for project always remains with the contractor hired by the owner. Design/build is preferred in certain industries such as industrial construction. As an example, building oil refineries and power plants are often so complex that this delivery method is preferred. 12

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